ECONOMIC TIMES OF PAKISTAN
Rupee declines as country prepares for IMF deal
The State Bank of Pakistan (SBP) has let the rupee depreciate by Rs0.49 to a new all-time low at Rs140.78 to the US dollar in the inter-bank market on Friday ahead of an expected agreement with the International Monetary Fund (IMF) for a long-term loan programme.
With this, the rupee has cumulatively dropped Rs2.25, or 1.6percent, in the past three weeks in a fresh round of depreciation, according to the central bank.
The IMF has asked Pakistan to end state control over the rupee and let the currency move freely to find its equilibrium against the US dollar and other major world currencies.
Also, the World Bank, which finances some of the infrastructure and social safety net projects in Pakistan, has supported the idea of leaving the rupee free from state control in a bid to give much-needed boost to exports and fix a faltering economy.
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Abdul Razak appointed CPEC business council chairman
In a move that may stir another controversy, the government has appointed Abdul Razak Dawood as chairman of the China-Pakistan Economic Corridor (CPEC) Business Council and an executive of his company – Descon Engineering – as member of the council.
The decision to appoint Dawood as chairman is also contrary to the original decision of the Cabinet Committee on CPEC. In its meeting held on March 12, the committee had decided that Minister for Planning, Development and Reform Makhdoom Khusro Bakhtiar would be the chairman of the CPEC Business Council.
Dawood is Adviser to Prime Minister on Commerce, Textile, Industry, Production and Investment.
The adviser will be the chairman of the CPEC Business Council and the minister for planning will be the co-chairman, according to a notification issued by the Board of Investment (BOI) this week.
The Cabinet Committee on CPEC had approved a 21-member CPEC Business Council. However, the BOI has notified a 25-member council. There are seven members from the public sector and 18 from the private sector, showed the notification.
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NA committee briefed about loan schemes for females
Financial assistance of up to Rs200,000 per borrower is being provided by Zarai Taraqiati Bank Limited (ZTBL) under the Khawateen Rozgar Scheme to empower rural women, said ZTBL President Sheikh Amanullah.
Briefing the National Assembly Standing Committee on National Food Security and Research on Friday, he pointed out that besides that facility, women could also acquire loans under the general credit schemes offered by the bank.
The committee, headed by Rao Muhammad Ajmal Khan, was told that under the Rozgar scheme, loans were extended to women for setting up cottage units, mushroom cultivation, poultry farming, goat/sheep farming, floriculture, ostrich farming, bee keeping and vegetable cultivation.
It was also briefed that ZTBL was providing financial assistance of up to Rs100,000 per borrower within a five-day time period under the Kissan Dost Scheme while up to Rs1.5 million per borrower was being provided under the Tahafuz-e-Ajnas Scheme.
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Egyptian business team to arrive in May 2019
A sector-specific trade delegation of Egypt will visit Pakistan from May 2 to explore avenues of trade and investment, announced Egypt Ambassador Ahmed Fadel Yacoub.
“Egypt wants to do business with Pakistan,” the ambassador remarked while sharing his views with Lahore Chamber of Commerce and Industry (LCCI) President Almas Hyder on Friday.
He stressed that brotherly and historic relations between the two countries ought to be reflected in trade as both countries had immense potential in the area.
Highlighting that Egypt currently imported rice from Dubai, Yacoub expressed the desire to import the staple crop from Pakistan in the future. He also termed Pakistan a big market for Egyptian businessmen.
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Gross External Debt Position By Sector (Million US$) | ||
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Gross External Debt Position | 30-Sep-18 | 31-Dec-18 |
General government | 65,382 | 65,574 |
Long-term | 64,061 | 64,537 |
Monetary authorities | 10,958 | 12,890 |
Long-term | 10,696 | 12,628 |
Banks | 4,452 | 4,790 |
Others sector | 12,086 | 12,012 |
Long-term | 9,644 | 9,774 |
Direct investment: Intercompany lending | 3,857 | 3,843 |
Gross External Debt | 96,735 | 99,108 |
Source: SBP |
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SBP reserves fall 3.14pc to $8.56bn
The foreign exchange reserves held by the central bank decreased 3.14percent on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday. On March 22, the foreign currency reserves held by the SBP were recorded at $8,560.9 million, down $277.8 million compared with $8,838.7 million in the previous week. “On March 25, 2019, the SBP received RMB 15 billion equivalent to $2.2 billion as proceeds of a loan obtained by the government of Pakistan from China,” stated the release. Overall, liquid foreign currency reserves, held by the country, including net reserves held by banks other than the SBP, stood at $15,473.9 million by March 22. Net reserves held by banks amounted to $6,913 million.
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SBP jacks up key policy rate by 50bps to 10.75pc
The State Bank of Pakistan (SBP) on Friday increased the key interest rate by 50 basis points to a 67-month high at 10.75 per cent in a bid to put breaks on accelerating inflationary pressure.
The monetary policy committee at the central bank has hiked the rate keeping in view the rising inflationary pressure because of the recovery in the prices of petroleum products and essential food items and the mounting fiscal deficit despite a sharp cut in the Public Sector Development Programme (development budget).
It has also taken into account the rationalisation of tariffs and duties and the narrowing real interest rate as it declined to 1.6 per cent in comparison with the four-year average of 2.85 per cent earlier.
Initial estimates suggest Pakistan is all set to hit a five-year high of 9.1 per cent inflation in March 2019 against 8.2 per cent in the previous month of February.
With the latest increase, the key interest rate has surged by a total of five percentage points since January 2018.
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Petrol rates expected to go up by Rs12
Oil prices are likely to increase by up to 12.8percent due to fluctuation in global oil prices for April 2019.
In a summary moved to the Petroleum Division on Friday, the Oil and Gas Regulatory Authority (Ogra) proposed that the price of high speed diesel be raised by Rs11.17 per litre or 10percent and petrol prices be hiked by Rs11.98 per litre or 12.8percent for the next month.
The regulator has also requested an increase in prices of kerosene oil of Rs6. 65 per litre or 7.7percent, while a rise of Rs6.49 per litre or 8.4percent has been recommended for light diesel oil (LDO).
If the government accepts this recommendation, then diesel prices would inflate from the existing Rs111.43 to Rs122.60 per litre, petrol from the current Rs92. 89 to 104.80 per litre, LDO from Rs77. 54 to Rs84.03 per litre and kerosene oil would go up from Rs86.31 to Rs92.96 per litre.
Petroleum Prices In Pakistan (30.3.2019) | |
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Product | Retail Price |
Premium | Rs. 92.88 /Ltr |
High Speed Diesel | Rs. 111.43 /Ltr |
Light Speed Diesel | Rs. 75.03 /Ltr |
Kerosene Oil | Rs. 86.31 /Ltr |
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Country moves to recapture Afghanistan’s wheat market
Pakistan is making efforts to open up a potential 2-million-ton wheat export market in Afghanistan and has begun taking special measures based on demands of exporters.
The move comes after Pakistan Tehreek-e-Insaf (PTI) leader Jehangir Tareen met with Khyber-Pakhtunkhwa (K-P) Chief Minister Mahmood Khan, senior Federal Board of Revenue (FBR) officials and representatives of security forces.
In the first phase, the duration for which goods trucks will be allowed to pass through the Torkham border has been increased to 10 hours and plans are afoot to open the border 24 hours a day for exports by August this year.
Sources said this could save exporters Rs90,000 per truck in transportation expenses. Apart from this, at the suggestion of Karachi exporters, work has begun on a project to reserve high protein and gluten wheat from Punjab and Sindh for export only.
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FBR extends office hours for taxpayers
The Federal Board of Revenue (FBR) issued instructions to all Large Taxpayer Units, Corporate Regional Tax Offices and Regional Tax Offices to extend office hours on Friday and Saturday to facilitate taxpayers in payment of duties and taxes and filing of income tax returns.
FBR directed tax collectors to extend office hours till 8 pm for Friday and till 10 pm for Saturday.
The FBR has so far issued tax notices in 6,451 cases and demanded Rs2.2 billion. It has managed to bring 2,671 people in the tax net and recovered nearly Rs1.4 billion.
This month, the National Database and Registration Authority (NADRA) informed the prime minister that it had picked 2.7 million people who enjoyed a lavish lifestyle but were not in the tax net.
There are less than 1.7 million people who file annual statutory income tax returns. The tax-to-GDP ratio is only 13percent, which this year can fall by around one percentage point instead of making any improvement.
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FBR reveals reasons for revenue shortfall
The Federal Board of Revenue (FBR) is determined to bridge the gap by enhancing its enforcement and bringing potential taxpayers under the tax net, said FBR Member Inland Revenue Policy Dr Hameed Ateeq Sarwar. Briefing the media on Thursday, he said the number of income tax return filers had improved to 1.76 million in first eight months of the current fiscal year from 1.3 million in the corresponding period of the previous year. The FBR official added that revenue collection stood at Rs2.33 trillion by February against the target of Rs2.57 trillion. Sarwar shared with the media that the FBR had received 455,806 new tax returns compared to the same period of last year. He said the government had fixed the revenue collection target at Rs4.398 trillion for fiscal year 2018-19 in order to meet financial requirements of the country, adding that it was required to collect Rs2.566 trillion by the end of last month (February).
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SBP’s interest rate decision may catch experts by surprise
The State Bank of Pakistan’s (SBP) monetary policy committee is all set to surprise a large section of capital market on Friday as experts have diversified views about the key interest rate – whether it will be left unchanged or increased by up to 75 basis points. Sources conducted a brief market survey and asked around 10 research houses about their expectations for revision in the policy rate for the next two months. Three of them said they anticipated no change, two expected a 25-basis-point hike, three predicted a 50-basis-point increase and two saw a 75-basis-point rise. A research house took a totally opposite stance, saying the central bank may revise down the policy rate by 25-50 basis points.
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Govt irked by delay in finalising lng terminal site
The Pakistan Tehreek-e-Insaf (PTI) government has expressed dismay over inordinate delays in decision-making to identify a suitable site for the third LNG terminal. The delays were caused by the previous Pakistan Muslim League-Nawaz (PML-N) government’s move on the last day of its tenure to scrap the competition process to favour one company. The Economic Coordination Committee (ECC) expressed dissatisfaction with the delays in a recent meeting. On February 23, 2018, the Port Qasim Authority (PQA) under Chairman Najaf Mirza initiated bidding for a location at PQA to set up a third LNG terminal. In a meeting of technical committee comprising the PQA DG Operations and other officials, chaired by Mirza, it was noted that Elengy and Energas had suggested different locations for the terminal.